How does the wholesale process work for an end buyer?

[Derek T.]

How does the wholesale process work from an end buyer (rehabber's) perspective? I was trying to find a step by step guide but I really couldn't find one. Once the wholesaler and rehabber agree on price what is next? Is this the process......

-Agree on price
-Wholesaler sends an assignment contract for you to sign or you send a contract with your buying price and language
-You put EMD into an escrow account
-Do a double closing

Is that basically it? Do they normally allow time for rehabbers to do their due diligence with an inspector and title company to run the title? I need more input to help me understand the complete process from a rehabber's viewpoint. Thanks.

[Brian Wall]

Derek,
Here is a how a recent transaction worked recently for me, where I was the wholesaler. Property was an REO, and my offer was all cash.
I partnered with a local Hard Money Lender to find me an end buyer.

The transaction is called a "back to back" closing.

It is a A-->B then B-->C.

Where
A = Bank/Seller
B = ME/Wholesaler
C = End Buyer

1) I secured the original purchase contract on the property. I had a 7 day inspection period.
2) Once I received the accepted contract, I put my $6k deposit in escrow. I then contacted my Hard Money Lender, who sent out an email to their buyers list. The email gave the details of the property, and the purchase price (purchase from me).
3) The buyers then went direct to inspect the property.
4) within 24 hours I had an offer, with no contingencies, with a $25k deposit, for my asking price. (The transaction will not complete if I cannot deliver clear title, so that is the only option for the buyer to get his deposit back).
5) I accepted that offer (duh!).
6) The end buyer opened escrow and put the non-refundable $25k deposit.
7) So, I had the end buyers deposit in escrow, before my inspection period ran out.
8) I then signed off contingencies.
9) Once clear title was determined, the end buyer put his cash in the B-->C escrow.
10) then the hard money lender put the purchase money in the A-->B escrow.
11) The A-->B escrow then closed.
12) about 1 week later, the B-->C escrow closed.
13) I then received the spread, between my purchase price, and my asking price to the end buyer, PLUS I got my deposit back.

I relied heavily on my HML to handle the transaction. For the B-->C escrow we used their recommended escrow company.

It went relatively smoothly.

This is certainly not the only way to do it, but it is one way.

Hope this helps,
Brian